Spain Renews Scrappage Program, Adds EV Subsidies

MADRID – Spain launches two new subsidy programs designed to increase light-vehicle sales.

One is the sixth edition of the Subsidies Program for Efficient Vehicles (PIVE) plan, funded with €175 million ($240 million) to help purchasers acquire new and more efficient cars, with individual payouts of €1,000 ($1,370) payments matched by auto dealers.

This subsidy could reach €1,500 ($2,050) if the car is for a large family with three or more children, or for a handicapped person.

The new PIVE tries to close a loophole in previous versions of the plan. Applicants seeking to scrap a car at least 10 years old, or a light-commercial vehicle at least 7, must prove they owned that vehicle in 2013.

Some months ago it was discovered many of the transactions in earlier PIVE schemes involved vehicles that had languished in junkyards for years.

It is estimated the latest PIVE plan could extend into October, funding the purchases of about 175,000 new vehicles priced less than €25,000 ($34,200), excluding value-added tax –€30,000 ($41,000) when the buyer is handicapped.

Auto dealers want the government to launch the plan as soon as possible, as funds for the fifth version of PIVE have run out and potential customers may stay out of the market until the new round of subsidies become available.

Officials with Spanish auto-dealer associations predict the PIVE scheme could help them close out 2014 with 830,000 cars sold, up 14.8% from 722,703 in 2013.

The government has funded all six editions of the plan with €715 million ($979 million).

The second subsidy plan aimed at helping the automotive industry is a new edition of the Movele program encouraging the purchase of electric vehicles with a minimum145-mile (90-km) range. It differs from the current version only in that the maximum subsidy is increased from €5,500 ($7,500) to €6,500 ($8,900).

The new Movele subsidies, available retroactive to Jan. 1 and expiring Dec. 31, can be added to PIVE incentives. Government and autonomous community agencies are eligible for Movele assistance, meaning the government effectively is subsidizing itself.

Specialty EVs such as Renault’s 2-seat Twizy, which is assembled in Valladolid, carry a €2,200 ($3,010) subsidy. Assistance to buyers of electric microbuses and commercial vehicles can reach €8,000 ($10,900).

Currently, Spain is the only European country that subsidizes the acquisition of vehicles powered by both electric and internal-combustion engines. France is mulling a plan to offer subsidies of up to €10,000 ($13,700) for EV purchases.